General Motors stocks closed 2.6 percent lower on Tuesday after President Donald Trump threatened to cut federal subsidies to the automaker for announcing it would be cutting thousands of American jobs.
On Tuesday, the president tweeted, “Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China. The U.S. saved General Motors, and this is the THANKS we get! We are now looking at cutting all (GM) subsidies, including for electric cars.
“General Motors made a big China bet years ago when they built plants there (and in Mexico) — don’t think that bet is going to pay off. I am here to protect America’s Workers!”
….for electric cars. General Motors made a big China bet years ago when they built plants there (and in Mexico) – don’t think that bet is going to pay off. I am here to protect America’s Workers!
— Donald J. Trump (@realDonaldTrump) November 27, 2018
GM stocks plummeted around 3.8 percent after the comments but finished the day 2.6 percent lower. The decline continued in trading early Wednesday.
White House economic adviser Larry Kudlow said Tuesday that the administration was “going to be looking at certain subsidies regarding electric cars and others, whether they should apply or not,” Politico reported.
The threat by Trump comes one day after the giant automaker announced that it would be cutting 14,000 jobs in North America.
GM said operations would be shut down at plants in Detroit; Warren, Ohio; White Marsh, Maryland; Warren, Michigan; and Oshawa, Ontario.
Sedans including the Chevy Volt, Impala and Cruze along with the Buick LaCrosse, Cadillac CT6 and Cadillac XTS are on the chopping block.
The job cuts include 8,000 salaried workers and 6,000 hourly workers would all be without jobs or be transferred to other plants.
GM said it was a restructuring move that would allow the company to prepare for the future with driverless and electric vehicles.
The company also said that it wanted to give consumers vehicles that they want, signaling a move away from sedans to focusing on hatchbacks and SUVs.
On Monday, Trump told a group of reporters that he had spoken to GM CEO Mary Barra after the announcement and said he was “very tough” when he spoke to her.
— CBS News (@CBSNews) November 26, 2018
The president said he told Barra that “this country has done a lot of General Motors” and that the company should “get back in there,” referring to Ohio.
“I’m not happy about it,” Trump said of the GM announcement. “They better put something else in.”